AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
     THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT,
dated as of the 24th day of May, 1996, is made by and
between CRESTAR BANK, a Virginia banking corporation (the
Lender), ELDYNE, INC., a California corporation (Eldyne),
UNIDYNE CORPORATION, a Virginia corporation (Unidyne), DCS
ACQUISITION SUB, INC., a Delaware corporation (DCS), and any
Subsidiary that subsequently becomes a party to this
Agreement in accordance with the provisions set forth below
(with Eldyne, Unidyne, DCS and any such Subsidiary being
referred to collectively as the Borrowers, and individually,
a Borrower).
                            RECITALS
  A.   The Lender, Eldyne, Unidyne and Diversified Control
                           Systems
L.L.C., a Nevada limited liability company (DCS LLC), are
parties to a Loan and Security Agreement, dated as of
February 8, 1995 (as amended to the date hereof, the
Original Agreement).
     B.   Pursuant to the Agreement and Plan of
Reorganization of Eldyne, Inc., dated as of April 19, 1996
(the Eldyne Acquisition Agreement) by and among Eldyne, Jack
Witt (Witt), ELD Acquisition Sub, Inc., and The Titan
Corporation, a Delaware corporation (Titan), Titan has
acquired all of the stock of Eldyne.  Pursuant to the
Agreement and Plan of Reorganization of Unidyne, Inc., dated
as of April 19, 1996 (the Unidyne Acquisition Agreement), by
and among Unidyne, Witt, UNI Acquisition Sub, Inc., and
Titan, Titan has acquired all of the stock of Unidyne.
Pursuant to the Asset Purchase Agreement by and among DCS
LLC, Witt, DCS and Titan, dated as of April 19, 1996 (the
DCS Acquisition Agreement), DCS acquired certain of the
assets of, and assumed certain of the liabilities of, DCS
LLC. Titan owns all of the stock of DCS.
     C.   Titan and the Borrowers desire to continue the
credit relationship with the Lender arising out of the
Original Agreement, subject to the terms of this Agreement.
The Lender has consented to Titan's acquisition of the
Borrowers and is willing to continue the credit
relationship, subject to the terms of this Agreement.
    D.   The Borrowers have coordinated certain business
                         functions,
including finance, marketing and treasury functions and such
coordinated functions include applying for and making use of
credit on a joint basis. Each Borrower derives substantial
direct and indirect benefits from its relationships with the
other Borrowers, including the benefits of enhanced credit
availability.
     E.   The Lender has agreed to make the Loans
(hereinafter defined) provided for in this Agreement
available to the Borrowers on a group basis such that each
Borrower is jointly and severally liable for all amounts
owing in connection with the financing, regardless of which
Borrower actually receives the Loan proceeds.  The Lender is
unwilling to provide this or similar financing to the
Borrowers on an individual basis. Consequently, the Loans
provided by this Agreement would be unavailable to the
individual Borrowers unless all participated in concert
hereunder.
     F.   In light of the foregoing, the Borrowers as
separate legal entities have joined together for the purpose
of obtaining the benefit of the extensions of credit under
this Agreement.  All parties to this Agreement acknowledge
and agree that the Lender has been induced to enter into
this Agreement and to extend credit under this Agreement in
reliance upon the joint and several liability of the
Borrowers.  Each Borrower acknowledges and agrees that it is
jointly and severally liable for all borrowings by the group
or any of its members under this Agreement, regardless of
whether such Borrower receives any portion of the proceeds
of a particular borrowing.
 G.   As one of the conditions for extending such credit to
                           all of
the
Borrowers jointly and severally, the Lender has required,
and the Borrowers have agreed, that the Borrowers shall
grant a perfected lien and security interest in the
Collateral of all the Borrowers as described in Section 3.1
of this Agreement.

     Accordingly, for good and valuable consideration, the
receipt and sufficiency of which are acknowledged, the
Lender and the Borrowers agree
that the Original Agreement is amended and restated to read
in its entirety as follows:

     Section 1.     Definitions.  As used in this Agreement,
the following terms shall have the meanings assigned to them
below, which meanings shall be equally applicable to the
singular and plural forms of the terms defined.

     "Accounts Receivable" means, collectively, and includes
all of the following, whether now owned or hereafter
acquired by any Borrower:  all property included within the
definitions of "accounts," "chattel paper," "documents" and
"instruments" set forth in the UCC; all present and future
rights to payments for goods sold or leased or for services
rendered, whether or not represented by instruments or
chattel paper, and whether or not earned by performance;
contract rights; all present and future rights to payments
for computer software, computer hardware or computer systems
sold, leased or licensed; proceeds of any letter of credit
of which any Borrower is a beneficiary; all forms of
obligations whatsoever owed to any Borrower, together with
all instruments and documents of title representing any of
the foregoing; all rights in any goods that any of the
foregoing may represent; any and all rights in any returned
or repossessed goods; and all rights, security and
guaranties with respect to any of the foregoing, including,
without limitation, any right of stoppage in transit.

     "Acquisition Agreements" means, collectively, the
Eldyne Acquisition Agreement, the Unidyne Acquisition
Agreement and the DCS Acquisition Agreement.

     "Affiliate" means, with respect to any specified
Person, any other Person that, directly or indirectly,
through one or more intermediaries, controls or is
controlled by, or is under common control with, such
specified Person.  The term "control" means the possession,
direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person,
whether through ownership of common stock, by contract or
otherwise.

     "Aging" means a schedule of all outstanding Receivables
(including separate itemizations of notes and leases) of the
Borrowers showing the initial invoice date of each
Receivable and the age of the Receivables in intervals of 30
days.

     "Agreement" means this Amended and Restated Loan and
Security Agreement, as the same may be amended, modified or
supplemented from time to time.

     "Assignment of Claims Act" means, collectively, the
Assignment of Claims Act of 1940, as amended, 31 U.S.C.
Section 3727, 41 U.S.C. Section 15, any applicable rules,
regulations and interpretations issued pursuant thereto, and
any amendments to any of the foregoing.

     "Assumption Agreement" means each Assumption Agreement,
substantially in the form of Exhibit A attached to this
Agreement, executed by a Subsidiary that becomes a party to
this Agreement and the other Loan Documents in accordance
with the provisions of Section 8.3 below.

 "Borrowing Base" means, at the time in question, the sum of
                             the
Eldyne Borrowing Base and the Unidyne Borrowing Base.

     "Borrowing Base Certificate" means a certificate of a
Borrower containing a computation of the Borrowing Base of
such Borrower and certifying that no Default has occurred
and is continuing, in form and substance satisfactory to the
Lender.

     "Business Day" means any day other than a Saturday,
Sunday or other
day on which commercial banks are authorized or required to
close under the laws of the State.
     "Capital Lease" means any lease that has been or should
be capitalized on the books of the lessee in accordance with
GAAP.
     "Chief Financial Officer" means the Senior Vice
President, Chief Financial Officer and Principal Accounting
Officer of Titan and each Borrower, or his designee.
     "Closing" means the initial disbursement of the Loans.
     "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
     "Collateral" means, collectively, and includes all
Accounts Receivable, Equipment, General Intangibles,
Inventory, the Real Estate and all other property of the
Borrowers in which a Lien is granted to the Lender pursuant
to this Agreement, the Mortgages or any other Loan Document.
     "Covenant Compliance Certificate" means a certificate
executed by the Chief Financial Officer substantially in the
form of Exhibit B attached to this Agreement, containing a
calculation of the financial covenants contained in Section
7 hereof and certifying that no Default has occurred and is
continuing.
     "Customer" means any Person obligated on a Receivable.
   "DCAA" means the Defense Contract Audit Agency and any
                          successor
thereto.

     "Debt" means, collectively, and includes, with respect
to any specified Person (a) indebtedness or liability for
borrowed money or for the deferred purchase price of
property or services; (b) obligations as a lessee under a
Capital Lease; (c) obligations to reimburse the issuer of
letters of credit or acceptances; (d) all guaranties,
endorsements (other than for collection or deposit in the
ordinary course of business) and other contingent
obligations to purchase, to provide funds for payment, to
supply funds to invest in any other Person or otherwise to
assure a creditor against loss; (e) obligations under
interest rate swap agreements or similar agreements; and (f)
obligations secured by any Lien on property owned by the
specified Person, whether or not the obligations have been
assumed.

     "Default" means any Event of Default or any event that,
with the giving of notice, the lapse of time, or both, would
constitute an Event of Default.

 "EBIDA" means, for any Borrower for any fiscal period, the
                           sum of
(a) Net Income of such Borrower, plus (b) depreciation
expense, amortization expense and interest expense (to the
extent each is deducted in determining Net Income).

   "EBIT" means, for any Borrower for any fiscal period, Net
Income of such Borrower plus, to the extent deducted to
determine Net Income, interest and income tax expense.

 "Eldyne Borrowing Base" means, at any time, the sum of (a)
                           85% of
Eligible Billed Government Receivables of Eldyne, plus (b)
75% of Eligible Billed Commercial Receivables of Eldyne.

     "Eldyne Sublimit" means $3,000,000.

     "Eligible Billed Commercial Receivables" means Eligible
Billed Receivables that do not arise out of a prime contract
between the
Government and Eldyne or Unidyne which has been assigned to
the Lender pursuant to the Assignment of Claims Act.
     "Eligible Billed Government Receivables" means Eligible
Billed Receivables that (a) arise out of a prime contract
between the Government and Eldyne or Unidyne, (b) have been
assigned directly to the Lender pursuant to the Assignment
of Claims Act, and (c) do not arise out of a classified
contract.
     "Eligible Billed Receivables" means Eligible
Receivables that have been billed to the appropriate
Customer and are aged less than 90 days from the date of the
initial invoice.  For the purposes of this definition, the
term "initial invoice" shall mean the first invoice relating
to the applicable goods shipped or services rendered, and
not any subsequent invoice relating thereto.
     "Eligible Receivables" means Accounts Receivable of
Eldyne or Unidyne (a) that represent valid obligations
incurred by a Customer for goods shipped or delivered or
services completed under valid contracts of sale, lease or
service that have been formally awarded to such Borrower and
for which all required contract documents have been executed
by the Customer and such Borrower and, in the case of
Accounts Receivable owed by the Government, for which funds
have been appropriated and allocated; (b) on which the
Customer is not Titan, another Borrower, an Affiliate or
Subsidiary of a Borrower or an Affiliate or Subsidiary of
Titan; (c) with respect to which such Borrower has no
knowledge or notice of any inability of the Customer to make
full payment; (d) from the face amounts of which have been
deducted all payments, setoffs, amounts subject to adverse
claims made in writing to such Borrower, contractual
allowances, bad debt reserves and other credits applicable
thereto; (e) that are subject to no Liens other than those
permitted by this Agreement; (f) that continue to be in full
conformity with the representations and warranties made by
such Borrower to the Lender in this Agreement; (g) with
respect to which the Lender is and continues to be satisfied
with the credit standing of the Customer; (h) on which the
Customer is not a creditor of such Borrower; (i) on which
the Customer is not a foreign government or an entity
organized and existing under the laws of a country other
than the United States; (j) in which the Lender has a
perfected, first priority security interest; (k) that are
payable in United States dollars in the United States; (l)
that are not evidenced by notes; (m) that are not in
dispute; and (n) that do not arise out of a bill and hold
sale, a guaranteed sale, a sale and return, a sale on
approval or a consignment transaction; provided, however,
and without limiting any other provisions of this Agreement
with respect to the exclusion of Receivables from the
category of Eligible Receivables and the Borrowing Base,
that (1) if the Lender reasonably determines that the
collectibility of any Receivable makes it unacceptable for
inclusion in the Borrowing Base and gives written notice to
such Borrower indicating the reasons for such determination,
then such Receivable shall thereafter be excluded from the
category of Eligible Receivables, (2) if more than 50% of
the aggregate face amount of Receivables owed by a Customer
are aged more than 89 days from the dates of the initial
invoices, then all Receivables owed by such Customer shall
be included in a separate line item on the Borrowing Base
Certificate and, at the Lender's option, shall be excluded
from the category of Eligible Receivables, and (3) in no
case shall Eligible Receivables include any Accounts
Receivable representing or arising out of retainages due
more than 30 days from the date of determination, holdbacks,
revenues recognized or costs incurred in excess of approved
or allowed reimbursement rates, cost overruns, unauthorized
work or work beyond the scope of a contract, rebillings or
contracts secured by surety bonds.
     "Equipment" means, collectively, and includes all of
the following, whether now owned or hereafter acquired by
any Borrower:  all items that are included within the
definitions of "equipment" and "fixtures" as set forth in
the UCC, including, without limitation, computer software,
computer hardware, computer systems, furniture, machinery,
vehicles and trade fixtures, together with any and all
accessories, accessions, parts and appurtenances thereto,
substitutions therefor and replacements thereof.
    "Equipment Loan" means the loan made by the Lender to
                           Unidyne
pursuant to Section 2.3.

     "Equipment Note" means a promissory note, in form and
substance acceptable to the Lender, made by the Borrowers in
the principal amount of the Equipment Loan, and payable to
the Lender, as such note may be amended, modified,
supplemented or replaced from time to time.
     "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time.
     "Event of Default" means any of the events specified as
an "Event of Default" under this Agreement, provided that
any requirement for the giving of notice, the lapse of time,
or both, or any other condition, has been satisfied.
    "GAAP" means generally accepted accounting principles
                        consistently
applied.

     "General Intangibles" means collectively and includes
all of the following, whether now owned or hereafter
acquired by any Borrower:  all property that is included
within the definition of "general intangibles" as set forth
in the UCC; choses in action, causes of action and all other
intangible property of every kind and nature, including,
without limitation, corporate or other business records,
inventions, designs, patents, patent applications,
trademarks, trademark applications, trade names, trade
secrets, good will, registrations, copyrights, licenses,
franchises, customer lists, tax refunds, tax refund claims,
rights of claims against carriers and shippers, leases and
rights to indemnification.

   "Government" means the United States of America or any
                          agency or
instrumentality thereof.

     "Guarantor" means The Titan Corporation, a Delaware
                        corporation.

     "Guaranty" means a guaranty agreement, in form and
substance acceptable to the Lender, from the Guarantor in
favor of the Lender, as the same may be amended, modified or
supplemented from time to time.

     "Interest Payment Date" means the first day of each
calendar month for the Working Capital Loans, and the 15th
day of each calendar month for the Mortgage Loan and the
Equipment Loan.

     "Inventory" means, collectively, and includes all of
the following, whether now owned or hereafter acquired by
any Borrower:  all property included within the definition
of "inventory" set forth in the UCC; all goods, computer
software, computer hardware or computer systems held or
intended for sale, lease or licensing by any Borrower or
furnished or to be furnished under contracts of sale,
leasing, licensing or service or used or consumed in the
business of any Borrower; and all raw materials, work in
process, finished goods, materials and supplies of every
nature used or usable in connection with the manufacture,
packing, shipping, advertising or sale of any such goods.

  "Leverage Ratio" means for any Borrower at any time, the
                          ratio of
Total Liabilities of such Borrower to Tangible Net Worth of
such Borrower.

    "LIBOR" means, as of the date of the Closing and as of
the first Business Day of each succeeding calendar month
(each, a LIBOR Calculation
Date), the rate at which dollar deposits with a one-month
maturity are offered to leading banks in the London
interbank market at 11:00 a.m. two business days prior to
the LIBOR Calculation Date, based on quotations published by
Reuters or The Wall Street Journal, plus adjustments
(expressed as a percentage) for reserve requirements,
deposit insurance premium assessments, broker's commissions
and other regulatory costs as determined by the Lender's
Funds Management Division in its sole discretion.
     "Lien" means any mortgage, deed of trust, pledge,
security interest, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), or
preference, priority or other security agreement, or
preferential arrangement, charge or encumbrance of any kind
or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement, any
Capital Lease and the filing of any financing statement
under the UCC or comparable law of any jurisdiction to
evidence any of the foregoing).
     "Loans" means the Working Capital Loans, the Mortgage
Loan and the Equipment Loan to be made to the Borrowers by
the Lender pursuant to this Agreement.
     "Loan Documents" means this Agreement, the Working
Capital Note, the Mortgage Note, the Equipment Note, the
Mortgages, the Guaranty, the Subordination Agreement and any
other document now or hereafter executed or delivered in
connection with the Obligations, in evidence thereof or as
security therefor, including, without limitation, any pledge
agreement, security agreement, deed of trust, mortgage,
promissory note or subordination agreement.
"Mortgage Loan" means the loan made by the Lender to Unidyne
pursuant to Section 2.2.

     "Mortgage Note" means a promissory note, in form and
substance acceptable to the Lender, made by the Borrowers in
the principal amount of the Mortgage Loan and payable to the
Lender, as such note may be amended, modified, supplemented
or replaced from time to time.

     "Mortgages" means a deed of trust with respect to the
Real Estate in Virginia and a mortgage with respect to the
Real Estate in Connecticut, each of which shall be in form
and substance acceptable to the Lender, and shall create a
first Lien against the Real Estate, as either such deed of
trust or mortgage may be amended, modified or supplemented
from time to time.

     "Net Income" means for any Borrower for any fiscal
period, consolidated gross revenues less all operating and
non-operating expenses, including all charges of a proper
character, less extraordinary gains of a non-recurring
nature, with all of the foregoing accounting terms being
determined in accordance with GAAP.

  "Notes" means the Working Capital Note, the Mortgage Note
                           and the
Equipment Note.

     "Obligations" means the Working Capital Loans, the
Mortgage Loan, the Equipment Loan, the Notes, all
indebtedness and obligations of the Borrowers under this
Agreement and the other Loan Documents, as well as all other
obligations, indebtedness and liabilities of the Borrowers
to the Lender, now existing or hereafter arising, of every
kind and description, whether or not evidenced by notes or
other instruments, and whether such obligations,
indebtedness and liabilities are direct or indirect, fixed
or contingent, liquidated or unliquidated, due or to become
due, secured or unsecured, joint, several or joint and
several, related or unrelated to the Loans, similar or
dissimilar to the indebtedness arising out of this
Agreement, of the same or a different class of indebtedness
as the
indebtedness arising out of this Agreement, including,
without limitation, any overdrafts in any deposit account
maintained by any Borrower with the Lender, all obligations
of any Borrower with respect to letters of credit issued by
the Lender for the account of any Borrower, any indebtedness
of any Borrower that is assigned to the Lender and any
indebtedness of any Borrower to any assignee of this
Agreement.

    "PBGC" means the Pension Benefit Guaranty Corporation
                         established
under ERISA.

     "Permitted Acquisition" means any transaction in which
a Borrower or a Subsidiary acquires all or substantially all
of the assets or outstanding capital stock of any Person or
merges or consolidates with any Person, provided that (a)
after giving effect thereto, no Default shall occur, (b) the
surviving entity, if not a Borrower, shall become a Borrower
under the terms of this Agreement within five Business Days
after the consummation of such transaction, (c) such
transaction must be approved by the Lender, which approval
shall be subject to the review by the Lender of all
documentation and financial analysis related to the
transaction as the Lender shall reasonably require, and
shall be granted or denied within 30 Business Days after the
Lender has received such documentation and analysis.

     "Person" means an individual, partnership, limited
liability company, corporation, business trust, joint stock
company, trust, unincorporated association, joint venture,
governmental authority or other entity of whatever nature.

     "Prime Rate" means the rate of interest established and
announced from time to time by the Lender as its Prime Rate,
it being understood and agreed that the Prime Rate is used
as a reference for fixing the lending rate on commercial
loans and is not necessarily the lowest or most favorable
rate of interest charged by the Lender on such loans.

     "Pro-Rated Current Maturities" means, for any Borrower,
as of the last day of a fiscal quarter, the current
maturities of long-term Debt of such Borrower then
outstanding, as determined in accordance with GAAP,
multiplied by a fraction, the numerator of which is the
number of fiscal quarters of the current fiscal year then
ended and the denomination of which is four.

     "Real Estate" means the office and warehouse facilities
of Unidyne (a) of approximately 37,200 square feet of base
floor area and 6,050 square feet of office space located on
3.96 acres of land on Princess Anne Road in Norfolk,
Virginia, and (b) of approximately 18,348 square feet of
base floor area and 6,523 square feet of office space
located on 1.27 acres of land in East Lyme, Connecticut.

 "Receivables" means the Accounts Receivable and the General
Intangibles.

     "Regulatory Change" means any change, after the date of
this Agreement, in any federal or state laws, rules and
regulations, or interpretations thereof, or the adoption
after the date of this Agreement of any rules,
interpretations, directives or requests, applying to a class
of financial institutions including the Lender, under any
federal or state laws or regulations by any court or
regulatory authority charged with the interpretation or
administration thereof.

     "State" means the Commonwealth of Virginia.

     "Subordinated Unidyne Debt" means the Debt of Unidyne
to Eldyne that is subordinated to the Obligations of Unidyne
pursuant to the terms of the Subordination Agreement.

     "Subordination Agreement" means the Subordination
Agreement, dated
as
of May 24, 1996, by and among Eldyne, Unidyne and the
Lender, as the same may be amended, modified or supplemented
from time to time.

     "Subsidiary" means a corporation, partnership, limited
liability company or other entity of which shares of stock
or other ownership interests having ordinary voting power to
elect a majority of the board of directors or other managers
of such corporation or entity are at the time owned, or the
management of which is otherwise controlled, directly or
indirectly, through one or more intermediaries, or both, by
the Borrowers or any one or more of them.

  "Tangible Net Worth" means for any Borrower, at any date,
                           (a) all
amounts that, in accordance with GAAP, would be included
under stockholders' equity on the balance sheet of such
Borrower at such time, plus (b) in the case of Unidyne, the
Subordinated Unidyne Debt, and in the case of Eldyne, the
redeemable preferred stock minus (c) amounts carried on the
books of such Borrower for (1) any write-up in the book
value of any assets resulting from a revaluation thereof
subsequent to the date of this Agreement, or in connection
with the Acquisition Agreements; (2) treasury stock; (3)
unamortized debt discount expense; (4) any cost of
investments in excess of the value of net assets acquired at
any time of acquisition; (5) loans or advances to, or
Receivables or accruals due from, another Borrower, the
Guarantor or any Affiliate or Subsidiary of the Guarantor or
such Borrower (other than Receivables arising in the
ordinary course of business, payable within 90 days,
pursuant to which there is a prime contractor and
subcontractor relationship on a Government contract), or
directors, officers, employees or shareholders of such
Borrower, any Affiliate of such Borrower or any Subsidiary;
(6) unmarketable securities; and (7) patents, patent
applications, copyrights, trademarks, trade names, good
will, research and development costs, organizational
expenses, capitalized software costs and other like
intangibles.

     "Termination Date" means December 31, 1996, and any
extension or extensions thereof granted by the Lender in its
sole discretion.

     "Total Liabilities" means, for any Borrower at any
date, the liabilities of the Borrower (including tax and
other proper accruals), computed in accordance with GAAP.

     "UCC" means the Uniform Commercial Code as adopted in

the State, and all amendments thereto.

     "Unidyne Borrowing Base" means, at any time, the sum of

(a) 85% of Eligible Billed Government Receivables of

Unidyne, plus (b) 75% of Eligible Billed Commercial

Receivables of Unidyne.

     "Unidyne Sublimit" means $4,000,000.

     "Unused Fee Percentage" means 3/8 of 1% per annum.

     "Working Capital Limit" means $7,000,000.

     "Working Capital Loans" means the loans made to Unidyne and
Eldyne by the Lender pursuant to Section 2.1.




     "Working Capital Note" means a promissory note, in form and
substance satisfactory to the Lender, made by the Borrowers in the
principal amount of $7,000,000 and payable to the Lender, as such
note may be amended, modified, supplemented or replaced from time to
time.




<PAGE>
     Section 2.     Loans.
     Section 2.1.   Working Capital Loans.
          (a)  Subject to the terms and conditions of this Agreement,
the Lender agrees to make Working Capital Loans to Eldyne and Unidyne
from time to time until the Termination Date in an aggregate principal
amount not to exceed the Working Capital Limit at any one time
outstanding.  Up to the Working Capital Limit, Eldyne and Unidyne may
borrow, repay without penalty and re-borrow hereunder from the date of
this Agreement until the Termination Date; provided, however, that no
Working Capital Loan will be disbursed by the Lender if, after such
disbursement, the aggregate principal amount of the Working Capital
Loans would exceed the Borrowing Base.
          (b)  In addition to the foregoing limits set forth in
Section 2.1(a), unless the Lender otherwise agrees (which it shall have
no obligation to do), the outstanding Working Capital Loans (1) made to
Eldyne shall not exceed at any time the lesser of the Eldyne Sublimit
or the Eldyne Borrowing Base, and (2) made to Unidyne shall not exceed
at any time the lesser of the Unidyne Sublimit or the Unidyne Borrowing
Base.

          (c)  The Borrowers shall immediately prepay the Working
Capital Loans to the extent that the aggregate unpaid principal
balances of the Working Capital Loans at any time exceed the Borrowing
Base, the Working Capital Limit or any of the applicable limits
specified in Section 2.1(b). The Borrowers acknowledge that as of the
date hereof, the outstanding amount of Working Capital Loans of Eldyne
is $2,001,500 and the outstanding amount of Working Capital Loans to
Unidyne is $1,986,000.

          (d)  The proceeds of the Working Capital Loans shall be used
for short-term working capital purposes and no other purpose.  At
Closing, the initial Working Capital Loans shall be used to repay the
loans made to the Borrowers pursuant to Sections 2.1 and 2.2 of the
Original Agreement.

          (e)  Eldyne or Unidyne may request that a Working Capital
Loan be made, which request may be in writing or by telephone and made
or signed by those individuals designated by such Borrowers from time
to time, in written instruments delivered to the Lender, as authorized
to make such requests (a "Request"); provided, however, that the
Borrowers shall remain liable with respect to any Working Capital Loan
disbursed by the Lender in good faith hereunder, even if such Working
Capital Loan is requested by an individual who has not been so
designated.  Any Request must be received by the Lender no later than
2:00 p.m. (Washington, D.C. time) on the date on which the Working
Capital Loan is to be made. Requests made by telephone shall be
confirmed in writing and delivered to the Lender within five Business
Days after the date of the request.  The proceeds of the Working
Capital Loans shall be credited to a deposit account maintained with
the Lender by the applicable Borrower.  Each Borrower agrees to confirm
in writing from time to time, when and as requested by the Lender, the
purpose for which the proceeds of each Working Capital Loan were used.

          (f)  The unpaid principal balance of the Working Capital
Loans shall bear interest at a rate per annum equal to LIBOR plus
2.75%.  The interest rate on the Working Capital Loans shall be
adjusted on the first Business Day of each calendar month based on
LIBOR in effect as of such first Business Day.  Payments of interest on
each Working Capital Loan shall be made on each Interest Payment Date,
beginning on the Interest Payment Date next succeeding the date of
disbursement of such Working Capital Loan.

          (g)  The obligation of the Borrowers to repay the Working
Capital Loans, together with interest thereon, shall be evidenced by
the
Working Capital Note.  The unpaid principal balance of the Working
Capital Note shall be payable on the Termination Date.

          (h)  The Borrowers and the Lender from time to time may agree
to extend the Termination Date or increase the amount of credit to be
provided under this Section 2.1, or both.  During any such periods of
extension, the remaining terms and conditions of this Agreement shall
remain in full force
and effect, and the Borrowers shall execute and deliver any amendments
or modifications to the Loan Documents as the Lender may require in
connection with any such extension or increase.  Nothing in this
Section 2.1(h) shall obligate the Lender to grant such extensions or to
increase the amount of credit provided under this Section 2.1.
     Section 2.2.   Mortgage Loan.
          (a)  Subject to the terms and conditions of this Agreement,
the Lender agrees to make the Mortgage Loan to Unidyne in the principal
amount of $1,272,745.66.  The proceeds of the Mortgage Loan shall be
disbursed at Closing and applied to the payment in full of the
commercial mortgage loan made to Unidyne by the Lender pursuant to
Section 2.3 of the Original Agreement.
          (b)  The unpaid principal balance of the Mortgage Loan shall
bear interest at a rate per annum equal to LIBOR plus 2.50%.  The
interest rate on the Mortgage Loan shall be adjusted on the first
Business Day of each calendar month based on LIBOR in effect as of such
first Business Day. Payments of interest on the Mortgage Loan shall be
made on each Interest Payment Date, beginning on the Interest Payment
Date next succeeding the Closing.

          (c)  The obligation of the Borrowers to repay the Mortgage
Loan shall be evidenced by the Mortgage Note.  The principal amount of
the Mortgage Loan shall be payable in equal consecutive monthly
installments of principal of $4,162.50 each, due on the 15th day of
each calendar month commencing on June 15, 1996.  If not sooner paid,
the Mortgage Loan shall be due and payable in full on February 15,
2000.  Partial prepayments of the Mortgage Note shall be applied to
installments due thereunder in the inverse order of their maturities.
Amounts prepaid with respect to the Mortgage Loan may not be
reborrowed.

     Section 2.3.   Equipment Loan.

          (a)  Subject to the terms and conditions of this Agreement,
the Lender agrees to make the Equipment Loan to Unidyne in the
principal amount of $158,123.75.

          (b)  The proceeds of the Equipment Loan shall be disbursed at
Closing and applied to the payment in full of the equipment loan made
to Unidyne by the Lender pursuant to Section 2.4 of the Original
Agreement.

          (c)  The unpaid principal balance of the Equipment Loan shall
bear interest at a rate per annum equal to LIBOR plus 2.50%.  The
interest rate on the Equipment Loan shall be adjusted on the first
Business Day of each calendar month based on LIBOR in effect as of such
first Business Day. Payments of interest on the Equipment Loan shall be
made on each Interest Payment Date, beginning on the Interest Payment
Date next succeeding the Closing.

          (d)  The obligations of the Borrowers to repay the Equipment
Loan shall be evidenced by the Equipment Note.  The principal amount of
the Equipment Note shall be repaid in equal consecutive monthly
installments of principal of $5,208.33 each, due on the 15th day of
each month, beginning on June 15, 1996.  If not sooner paid, the
Equipment Loan shall be due and payable in full on February 15, 1999.
Partial prepayments of the Equipment Note shall be applied to
installments due thereunder in the inverse order of their maturities.
Amounts prepaid with respect to the Equipment Loan may not be
reborrowed.

     Section 2.4.   Fees.  The Borrowers agree to pay to the Lender (a)
in consideration of the Working Capital Loans, on the first Business
Day of each January, April, July and October, commencing with the first
such date after the date of this Agreement, and on the Termination
Date, a commitment
fee equal to the applicable Unused Fee Percentage per annum of the
average daily amount of the difference between the Working Capital
Limit and the aggregate unpaid principal amount of the Working Capital
Loans outstanding on each day during the preceding quarter or portion
thereof, which fee shall commence to accrue as of the date of this
Agreement; (b) on the date of the Closing, all accrued and unpaid fees
due under the Original Agreement; and (c) a $15,000 non-refundable
renewal and assumption fee, payable at Closing.

   Section 2.5.   Payments and Computations.  All payments due under
this Agreement (including any payment or prepayment of principal,
interest, fees and other charges) or with respect to the Notes or the
Loans shall be made in lawful money of the United States of America, in
immediately available funds, without defense, setoff or counterclaim,
to the Lender at its office at 8245 Boone Boulevard, Vienna, Virginia
22182, or at such other place as the Lender may designate, and shall be
applied first to accrued fees, next to accrued late charges, next to
accrued interest and then to principal. If any payment of principal,
interest or fees is due on a day other than a Business Day, then the
due date will be extended to the next succeeding full Business Day and
interest and fees will be payable with respect to the extension.  If
any payment of principal, interest or fees is not made within ten days
of its due date, the Borrowers agree to pay to the Lender a late charge
equal to 5% of the amount of the payment.  Upon the occurrence of an
Event of Default and during the continuation of such Event of Default,
interest shall accrue on the Loans at a per annum rate of 2% above the
rate of interest that otherwise would be applicable.  Interest and fees
shall be computed on the basis of a year of 360 days and actual days
elapsed.  The Lender may, but shall not be obligated to, debit the
amount of any payment due under this Agreement to any deposit account
of any Borrower maintained with the Lender.  No setoff, claim,
counterclaim, reduction or diminution of any obligation or any defense
of any kind or nature that any Borrower has or may have against the
Lender (other than the defense of payment) shall be available against
the Lender in any suit or action brought by the Lender to enforce this
Agreement or any other Loan Document.  The foregoing shall not be
construed as a waiver by any Borrower of any rights or claims that such
Borrower may have against the Lender, but any recovery upon such rights
and claims shall be had from the Lender separately, it being the intent
of this Agreement and the other Loan Documents that the Borrowers shall
be obligated to pay, absolutely and unconditionally, all amounts due
hereunder and under the other Loan Documents.

     Section 2.6.   LIBOR Option.  If the Lender determines in good
faith that it is unable to obtain funds in the London interbank market
or that LIBOR does not accurately reflect the cost to the Lender of
obtaining funds to make the Loans, the Lender shall give written notice
of such determination to the Borrowers and the interest rate on such
Loans, effective as of the date of such notice, shall be calculated at
the Prime Rate plus 1/4% per annum, adjusted daily when and as the
Prime Rate is changed.

     Section 3.     Collateral.

     Section 3.1.   Security Interest.

          (a)  To secure the Obligations, Eldyne and Unidyne reaffirm
the security interest granted by the Original Agreement, and each
Borrower grants to the Lender, its successors and assigns, a security
interest in the Accounts Receivable, the Equipment, the General
Intangibles, and the Inventory, all additions and accessions thereto
and replacements thereof, all proceeds and products thereof, all books
of account and records,
including all computer software relating thereto, all policies of
insurance on any property of each Borrower and all proceeds of such
policies, all deposits of each Borrower (general or special, time or
demand, provisional or final) at any time maintained with or held by
the Lender or its Affiliates, including any certificates of deposit,
and all instruments,
investments or securities held for each Borrower, and all indebtedness
owed to each Borrower by the Lender or any of its Affiliates.

          (b)  As additional security for the Obligations, Unidyne
shall execute, deliver and record modifications to the Mortgages to
confirm the first priority against the Real Estate obtained by the
Lenders in connection with the Original Agreement.  The Mortgage
against the Real Estate in Virginia shall secure $1,100,000 of
outstanding Obligations, and the Mortgage against the Real Estate in
Connecticut shall secure $650,000 of the outstanding Obligations.

     Section 3.2.   Receivables.

          (a)  Each Borrower represents and warrants as to each and
every Eligible Receivable now existing that:  (1) it is a bona fide
existing obligation, valid and enforceable against the Customer, for
goods sold or leased or services rendered in the ordinary course of
business; (2) it is subject to no dispute, defense or offset except as
disclosed in writing to the Lender; (3) all instruments, chattel paper
and other evidences of indebtedness, issued to any Borrower with
respect to any Receivable have been delivered to the Lender, and,
together with all supporting documents delivered to the Lender, are
genuine, complete, valid and enforceable in accordance with their
terms; (4) it is not subject to any discount, allowance or special
terms of payment except as disclosed in writing to the Lender or as
permitted by Section 3.2(b) below; (5) the security interest in any
collateral securing the Receivables is a perfected, first priority
security interest; and (6) it is not and shall not be subject to any
prohibition or limitation upon assignment.  Each Borrower covenants and
agrees that each Eligible Receivable arising after the date of this
Agreement will be in conformance with the foregoing representations.

          (b)  The Borrowers shall immediately notify the Lender of (1)
any dispute in excess of $50,000 with a Customer, and (2) the
bankruptcy, insolvency, receivership, assignment for the benefit of
creditors or suspension of business of any such Customer of which any
Borrower has knowledge.  No Borrower shall compromise or discount any
Receivable without the prior written consent of the Lender except for
(i) ordinary trade discounts or allowances for prompt payment, and (ii)
prior to the occurrence of a Default, such compromises or discounts
that, after giving effect thereto, will not cause the Borrowing Base to
be less than the aggregate unpaid principal balance of the Working
Capital Loans and Reducing Revolver Loans then outstanding.

          (c)  Upon the occurrence and during the continuation of an
Event of Default, if required by the Lender, each Borrower shall
establish a lockbox with the Lender and shall direct all Customers to
make payments on Receivables to such lockbox by printing such direction
on all invoices given to Customers.  The Borrowers also shall remit to
such lockbox or deliver to the Lender all payments on Receivables
received by any Borrower. Such payments shall be remitted or delivered
in their original form on the day of receipt.  All notes, checks and
other instruments so received by any Borrower shall be duly endorsed to
the order of the Lender.  The payments remitted to the lockbox and all
payments delivered to the Lender shall be credited to a cash collateral
account maintained by the Lender in the name of the Borrowers over
which the Lender shall have the exclusive power of withdrawal.  After
final collection, funds credited to the cash collateral account shall
be applied to the payment of the Obligations.  If a Default shall occur
and be continuing, then, at the option of the Lender, all funds in the
cash collateral account shall be retained in the cash collateral
account and
be held as security for the Obligations, and funds in the cash
collateral account may be applied to the Obligations by the Lender from
time to time, whether or not such Obligations are then due.
          (d)  Upon the occurrence of a Default, the Lender shall have
the right to notify Customers of its security interest in the
Receivables and require payments to be made directly to the Lender,
and, to facilitate
direct collection, the Lender shall have the right to take over the
Borrowers' post office boxes or make other arrangements, with which the
Borrowers shall cooperate, to receive the Borrowers' mail.

         (e)  The Borrowers shall execute all other agreements,
instruments and documents and shall perform all further acts that the
Lender may require with respect to Receivables owing by the Government
to ensure compliance with the Assignment of Claims Act.

     Section 3.3.   Inventory and Equipment.

          (a)  All of the Inventory and Equipment is now, and will
continue to be, kept only at the locations designated on Schedule 1
attached to this Agreement.  The Borrowers shall give the Lender prior
written notice before any Inventory or Equipment with an aggregate book
value of more than $100,000 is moved or delivered to a location other
than those designated on Schedule 1, and the Lender's lien and security
interest will be maintained despite the location of the Inventory or
Equipment.  The Borrowers shall execute and record financing statements
in all jurisdictions in which Inventory or Equipment with an aggregate
book value of $100,000 or more is to be located for more than four
months.  The Borrowers shall not, without the prior written consent of
the Lender, permit any Inventory or Equipment with an aggregate book
value in excess of $100,000 to be moved to a location outside of the
United States of America.

          (b)  The Borrowers shall keep and maintain the Equipment in
good operating condition and repair.  The Borrowers shall not permit
any of the Equipment to become a fixture to any real estate unless
subordination agreements satisfactory to the Lender are obtained from
any owner or mortgagee of such real estate.  Immediately on demand
therefor by the Lender, the Borrowers shall deliver to the Lender any
and all evidence of ownership of any of the Equipment.  If any
Equipment is subject to a certificate of title at any time, the
Borrowers shall deliver such certificate of title to the Lender,
together with such documents as are necessary to cause the Lender's
security interest to be noted thereon. None of the Equipment shall be
sold, transferred, leased or otherwise disposed of without the prior
written consent of the Lender, except for (1) sales or dispositions of
obsolete Equipment, and (2) sales or dispositions of Equipment that is
contemporaneously replaced with Equipment of comparable value and
utility; provided, however, that the Borrowers shall not sell or
dispose of any Equipment specifically related to the Equipment Loan,
unless the Borrowers repay the outstanding balance of the Equipment
Loan in an amount determined by the Lender to be the value of the
Equipment being sold or disposed of.

          (c)  The Lender's security interest shall extend and attach
to Inventory that is presently in existence and is owned by any
Borrower or in which any Borrower purchases or acquires an interest at
any time and from time to time in the future, whether such Inventory is
in transit or in such Borrower's constructive, actual or exclusive
occupancy or possession or not and wherever such Inventory may be
located, including, without limitation, all Inventory that may be
located at the premises of any Borrower or upon the premises of any
carriers, forwarding agents, truckers, warehousemen, vendors, selling
agents, finishers, convertors or other third parties who may have
possession of the Inventory.

          (d)  Upon the sale, exchange, lease or disposition of the
Inventory, the security interest of the Lender, without break in
continuity and without further formality or act, shall continue in and
attach to all cash and non-cash proceeds of such sale, exchange, lease
or disposition, including Inventory returned or rejected by customers
or repossessed by any Borrower or the Lender.  As to any such sale,
exchange, lease or disposition, the Lender shall have all of the rights
of an unpaid seller, including stoppage in transit, replevin, detinue
and reclamation.
          (e)  Except for sales or leases made in the ordinary course
of business, the Borrowers shall not sell, lease, encumber or dispose
of or permit the sale, lease, encumbrance or disposal of any Inventory
without the prior written consent of the Lender.
     Section 3.4.   Defense of Collateral.  The Borrowers, at their
expense, will defend the Collateral against any claims or demands
adverse to the Lender's security interest and will promptly pay, when
due, all taxes or assessments levied against any Borrower on the
Collateral.
     Section 3.5.   Information Regarding Collateral.  The Borrowers
shall provide the Lender such information as the Lender from time to
time reasonably may request with respect to the Collateral, including,
without limitation, statements describing, designating, identifying and
evaluating all Collateral and listing all sales and purchases of
Inventory occurring within a designated time period.
   Section 3.6.   Insurance of Collateral.  The Borrowers shall have
the Inventory and Equipment insured against loss or damage by fire,
theft, burglary, pilferage, loss in transportation and such other
hazards as the Lender shall specify, by insurers satisfactory to the
Lender, in amounts satisfactory to the Lender and under policies
containing loss payable clauses satisfactory to the Lender.  Any such
insurance policies, or evidence thereof satisfactory to the Lender,
shall be deposited with the Lender.  The Borrowers agree that the
Lender shall have a security interest in such policies and the proceeds
thereof, and, if any loss should occur, the proceeds may be applied to
the payment of the Obligations or to the replacement or restoration of
the Inventory or Equipment damaged or destroyed, as the Lender may
elect or direct.  After the occurrence of a Default, the Lender shall
have the right to file claims under any insurance policies, to receive
any payments that may be made thereunder, and to execute any and all
endorsements, receipts, releases, assignments, reassignments or other
documents that may be necessary to effect the collection, compromise or
settlement of any claims under any of the insurance policies.

     Section 3.7.   Perfection of Security Interest.  The Borrowers
shall perform any and all steps in all relevant or appropriate
jurisdictions as may be necessary or reasonably requested by the Lender
to perfect, maintain and protect the Lender's security interest in the
Collateral. All instruments, chattel paper and documents of title that
are part of the Collateral shall be delivered to the Lender, duly
endorsed in blank. The Borrowers shall pay the taxes and costs of, or
incidental to, any recording or filing of any financing statements
concerning the Collateral.  The Borrowers agree that a carbon,
photographic, photostatic or other reproduction of this Agreement or of
a financing statement is sufficient as a financing statement.

     Section 3.8.   Power of Attorney.  Each Borrower appoints the
Lender and any officer, employee or agent of the Lender, as the Lender
from time to time may designate, as attorneys-in-fact for each Borrower
to perform all actions necessary or desirable in the reasonable
discretion of the Lender to effect the provisions of this Agreement and
to carry out the intent of this Agreement, to do any act that any
Borrower is required to do pursuant to the terms of this Agreement and
to exercise such rights and powers as any Borrower might exercise with
respect to the Collateral, all at the cost and expense of the
Borrowers.  Each Borrower agrees that
neither the Lender nor any other such attorney-in-fact will be liable
for any acts of omission or commission, unless such acts were willful
and malicious, nor for any error of judgment or mistake of law or fact.
This power is coupled with an interest and is irrevocable so long as
any Obligations are outstanding.  The Lender agrees that it shall not
be entitled to exercise its rights under this Section 3.8 prior to the
occurrence of a Default.
     Section 3.9.   Limitations on Obligations.  It is expressly agreed
by the Borrowers that, notwithstanding any other provision of this
Agreement,
the Borrowers shall remain liable under each Receivable and contract
giving rise to each Receivable to observe and perform all the
conditions and obligations to be observed and performed by any Borrower
in accordance with and pursuant to the terms and provisions of each
such Receivable and contract.  The Lender shall not have any obligation
or liability under any Receivable or contract by reason of or arising
out of this Agreement or the assignment of such Receivable or contract
to the Lender or the receipt by the Lender of any payment relating to
the Receivable pursuant to this Agreement, nor shall the Lender be
required or obligated in any manner to perform or fulfill any of the
obligations of any Borrower under or pursuant to any Receivable or
contract, or to make any payment, or to make any inquiry as to the
nature or the sufficiency of any payment received by it or the
sufficiency of any performance by any party under any Receivable, or to
present or file any claim, or to take any action to collect or enforce
any performance or the payment of any amounts that may have been
assigned to it or to which it may be entitled at any time or times.

     Section 3.10.  Indemnification.  In any suit, proceeding or action
brought by or against the Lender relating to the Collateral, the
Borrowers will save, indemnify and keep the Lender harmless from and
against all expense, loss or damage suffered by reason of any defense,
setoff, counterclaim, recoupment or reduction of liability whatsoever
of any obligor thereunder, arising out of a breach by any Borrower of
any obligation thereunder or arising out of any other agreement,
indebtedness or liability at any time owing to or in favor of such
obligor or its successors from any Borrower, and all such obligations
of any Borrower shall be and remain enforceable against and only
against such Borrower and shall not be enforceable against the Lender.
The foregoing obligation of the Borrowers to indemnify the Lender shall
not extend to any suit, proceeding or action arising out of the
Lender's gross negligence or willful misconduct.

     Section 4.     Representations and Warranties.  Each Borrower
represents and warrants that:

   Section 4.1.   Organization, Good Standing and Due Qualification.
No Borrower has a Subsidiary.  Each Borrower is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation or organization.  Each Borrower has
the power and authority to own its assets and to transact the business
in which it is now engaged or in which it is proposed to be engaged,
and is duly qualified as a foreign corporation or a foreign limited
liability company, as applicable, and in good standing under the laws
of each other jurisdiction in which such qualification is required.

     Section 4.2.   Power and Authority.  The execution, delivery and
performance by the Borrowers of the Loan Documents to which each is a
party have been duly authorized by all necessary corporate action and
do not and will not (a) require any consent or approval of, or filing
or registration with, any governmental agency or authority or the
stockholders of such Borrower; (b) contravene such Borrower's charter
or bylaws; (c) result in a breach of or constitute a default under any
agreement or instrument to which such Borrower is a party or by which
it or its properties may be bound or affected; (d) result in or require
the
creation or imposition of any Lien upon or with respect to any of the
properties now owned or hereafter acquired by such Borrower; or (e)
cause such Borrower to be in default under any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award
applicable to such Borrower.
     Section 4.3.   Legally Enforceable Agreement.  This Agreement is,
and each of the other Loan Documents when delivered under this
Agreement will be, legal, valid and binding obligations of each
Borrower and enforceable against each Borrower in accordance with their
respective terms.

     Section 4.4.   Financial Statements.  The financial statements of
the Borrowers that have been furnished to the Lender in connection with
this
Agreement are complete and correct and fairly present the financial
condition of the Borrowers as of the dates of such statements.  Since
the dates of such statements, there has been no material adverse change
in the condition (financial or otherwise), business or operations of
any Borrower.
     Section 4.5.   Litigation.  Except for the litigation described on
Schedule 4.5, there is no pending or threatened action or proceeding
against or affecting any Borrower before any court, governmental agency
or arbitrator, that, in any one case or in the aggregate, may affect
the financial condition, operations, properties or business of any
Borrower in a materially adverse manner.

     Section 4.6.   Ownership and Liens.  Each Borrower has title to
all
of
its assets, including the Collateral, and none of the Collateral or
such assets is subject to any Lien, except Liens permitted by this
Agreement.

     Section 4.7.   ERISA.  The Borrowers are in compliance in all
material
respects with all applicable provisions of ERISA.  None of the
Borrowers has incurred any material "accumulated funding deficiency"
within the meaning of Section 302 of ERISA or Section 412 of the Code,
nor has any Borrower incurred any material liability to the PBGC in
connection with any "employee pension benefit plan" (as defined in
Section 3(2) of ERISA) established or maintained by any Borrower.  None
of the employee pension benefit plans (as defined above) of any
Borrower, nor any trusts created thereunder, nor any trustee or
administrator thereof, has engaged in a "prohibited transaction," as
such term is defined in Section 406 of ERISA or Section 4975 of the
Code, that could subject such plans or any of them, any such trust, or
any trustee or administrator thereof, or any party dealing with such
plans or any such trust to any material liability or tax or penalty on
prohibited transactions imposed by such SectionSection 406 or 4975.
None of the Borrowers nor any Affiliate of any Borrower is now, or at
any time in the past has been, obligated to make contributions to a
"multiemployer plan," as such term is defined in Section 4001(a)(3) of
ERISA.

     Section 4.8.   Taxes.  Each Borrower has filed all tax returns
(federal, state and local) required to be filed and have paid all
taxes, assessments and governmental charges and levies thereon to be
due, including interest and penalties.

     Section 4.9.   Debt.  No Borrower is in any manner directly or
contingently obligated with respect to any Debt that is not permitted
by this Agreement.  No Borrower is in default with respect to any Debt.

     Section 4.10.  Corporate Name; Chief Executive Office.  No
Borrower
nor any predecessor of any Borrower has used any corporate or
fictitious name other than its current corporate name and the other
names listed on Schedule 2 attached to this Agreement.  The chief
executive office of each Borrower, within the meaning of Section
9.103(3)(d) of the UCC, is
3033 Science Park Road, San Diego, California 92121, in the case of
Eldyne; 8040 Villa Park Drive, Suite 800, Richmond, Virginia 23228, in
the case of DCS, and 3835 E. Princess Anne Road, Norfolk, Virginia
23502, in the case of Unidyne.

     Section 4.11.  Debarment and Suspension.  No event has occurred
and
no
condition exists that is likely to result in the debarment or
suspension of any Borrower from any contracting with the Government,
and no Borrower has, nor has any Affiliate of any Borrower, been
subject to any such debarment or suspension prior to the date of this
Agreement.

     Section 5.     Affirmative Covenants.  Each Borrower covenants and
agrees that:

     Section 5.1.   Maintenance of Existence.  Each Borrower will
preserve
and maintain its corporate or limited liability company existence and
good standing in the jurisdiction of its incorporation or organization,
and
qualify and remain qualified as a foreign corporation or limited
liability company in each jurisdiction in which such qualification is
required.
     Section 5.2.   Maintenance of Records.  Each Borrower will keep
adequate records and books of account, in which complete entries will
be made in accordance with GAAP, reflecting all financial transactions
of such Borrower.  The principal records and books of account,
including those concerning the Collateral, shall be kept at the chief
executive office of the Borrowers described in Section 4.10 above.  No
Borrower will move such records and books of account or change its
chief executive office or the name under which it does business without
(a) giving the Lender at least 30 days' prior written notice, and (b)
executing and delivering financing statements satisfactory to the
Lender prior to such move or change.

     Section 5.3.   Maintenance of Properties.  Each Borrower will
maintain, keep and preserve all of its properties (tangible and
intangible) necessary or useful in the proper conduct of its business
in good working order and condition, ordinary wear and tear excepted.

     Section 5.4.   Conduct of Business.  Each Borrower will continue
to
engage in an efficient and economical manner in a business of the same
general type as conducted by it on the date of this Agreement.

     Section 5.5.   Maintenance of Insurance.  Each Borrower will
maintain
insurance with financially sound and reputable insurance companies or
associations in such amounts and covering such risks as are usually
carried by companies engaged in the same or a similar business and
similarly situated, including, without limitation, insurance covering
the Inventory and Equipment as required by this Agreement and insurance
covering the Real Estate as required by the Mortgages.

     Section 5.6.   Compliance with Laws.  Each Borrower will comply in
all
respects with all applicable laws, rules, regulations and orders
(including, without limitation, ERISA), such compliance to include,
without limitation, paying, before the same become delinquent, all
taxes, assessments and governmental charges imposed upon it or upon its
property.

     Section 5.7.   Right of Inspection.  At any reasonable time and
from
time to time, each Borrower will permit the Lender or any agent or
representative of the Lender to audit and verify the Collateral,
examine and make copies of and abstracts from the records and books of
account of, and visit the properties of, such Borrower, and to discuss
the
affairs, finances and accounts of such Borrower with any of their
respective officers and directors, such Borrower's independent
accountants and the contracting officers and DCAA auditors responsible
for such Borrower's Government contracts.  The Borrowers agree to pay
the Lender its customary audit fees and related expenses for each audit
conducted by the Lender.
     Section 5.8.   Reporting Requirements.  The Borrowers will furnish
to
the Lender:

          (a)  Monthly Financial Statements.  As soon as available and,
in any event, within 30 days after the end of each of the first two
months of each fiscal quarter and 55 days after the end of the last
calendar month of each fiscal quarter, (except at fiscal year end)
unaudited financial statements of each Borrower consisting of a balance
sheet as of the end of such month and statements of income,
stockholders' equity and cash flows for the period commencing at the
end of the previous fiscal year and ending with the last day of such
month, all in reasonable detail and all prepared in accordance with
GAAP.  Such financial statements shall be certified to be accurate by
the Chief Financial Officer;
          (b)  Annual Financial Statements.  As soon as available and,
in any event, within 100 days after the end of each fiscal year,
audited financial statements of each Borrower consisting of a balance
sheet as of the end of such fiscal year, and statements of income,
stockholders' equity
and cash flows for such fiscal year, all in reasonable detail and
stating in comparative form the respective figures for the
corresponding date and period in the prior fiscal year and all prepared
in accordance with GAAP. The statements shall be accompanied by an
opinion thereon acceptable to the Lender of an independent certified
public accounting firm selected by each Borrower and acceptable to the
Lender;
        (c)  Tax Returns.  If requested by the Lender, as soon as
available and, in any event, within five Business Days after filing,
the federal income tax returns of the Borrowers and the Guarantor;

          (d)  Management Letters.  If requested by the Lender,
promptly upon receipt thereof, copies of any reports submitted to any
Borrower by independent certified public accountants in connection with
examination of the financial statements of any Borrower;
          (e)  Notice of Litigation.  Promptly after the commencement
thereof, notice of all actions, suits and proceedings before any court
or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting any Borrower, in which
more than $100,000 in damages is sought, or that, if determined
adversely to such Borrower, could have a material adverse effect on the
financial condition, properties or operations of such Borrower;
          (f)  Notice of Defaults and Events of Default.  As soon as
possible and, in any event, within five days after the occurrence of
each Default and Event of Default, a written notice setting forth the
details of such Default or Event of Default and the action that is
proposed to be taken by the Borrowers with respect thereto;
          (g)  Proxy Statements, etc.  Promptly after the sending or
filing thereof, copies of all proxy statements, financial statements
and reports that any Borrower or any Subsidiary sends to its
stockholders, and copies of all regular, periodic and special reports,
and all registration statements that any Borrower files with the
Securities and Exchange Commission or any governmental authority that
may be substituted therefor, or with any national securities exchange;
          (h)  Borrowing Base Certificate.  On or before the 25th day
of each calendar month, a Borrowing Base Certificate from each Borrower
appropriately completed and executed by the Chief Financial Officer and
including a computation of the Eldyne Borrowing Base and the Unidyne
Borrowing Base, respectively, as of the last day of the most recently
ended monthly accounting period;
          (i)  Receivables Detail.  On or before the 25th day of each
calendar month, an Aging for each Borrower as of the last day of the
most recently ended monthly accounting period, accompanied by (1)
reports relating to the Receivables setting forth a description of
contracts giving rise to Receivables, the percentage of completion of
the work to be performed with respect to such contracts, the amounts
billed under such contracts and the amounts remaining to be billed, in
form and detail satisfactory to the Lender, and (2) such other invoices
and supporting documents to the schedules as the Lender from time to
time reasonably may request (including any backlog reports with respect
to outstanding contracts of each Borrower);
          (j)  Bids.  Within 30 days after the end of each fiscal
quarter of Eldyne, a summary of bids and proposals for each Borrower,
in form and detail satisfactory to the Lender;
          (k)  Compliance Certificate.  Within 55 days after the end of
each fiscal quarter (except at fiscal year end) of Eldyne, a Covenant
Compliance Certificate of the Chief Financial Officer;
          (l)  Audits.  Promptly after receipt thereof by a Borrower,
(1) the results of the audits of any Government contracts, and (2)
notice of any final decision of a contracting officer disallowing costs
aggregating more than $50,000, which disallowed costs arise out of any
audit of the contracts of any Borrower with the Government by DCAA or
any other agent of the Government;
          (m)  Contracts.  Promptly after receipt by any Borrower of
notice thereof, any material modifications to or the termination of any
contract or agreement relating to Eligible Receivables;
          (n)  Post-Closing Financials.  As soon as they are available,
copies of the post-closing audited financial statements to be delivered
to Titan pursuant to the Acquisition Agreements; and
          (o)  General Information.  Such other information respecting
the condition or operations, financial or otherwise, of any Borrower or
the Guarantor as the Lender from time to time reasonably may request,
including without limitation, current Borrowing Base Certificates and
Agings if the Lender has reason to believe that a Default has occurred
or is likely to occur.
     Section 5.9.   Life Insurance.  Unidyne shall maintain a life
insurance policy insuring the life of David Conner, naming Unidyne as
the beneficiary, in the amount of $750,000, in full force and effect as
long as any Obligations are outstanding.
    Section 6.     Negative Covenants.  Each Borrower agrees that,
without first obtaining the prior written consent of the Lender:
     Section 6.1.   Liens.  No Borrower will create, incur, assume or
permit to exist any Lien upon or with respect to any of its properties,
now owned or hereafter acquired, except:  (a) Liens in favor of the
Lender; (b) Liens that are incidental to the conduct of the business of
such Borrower, are not incurred in connection with the obtaining of
credit and do not materially impair the value or use of assets of such
Borrower;
(c) Liens on the Equipment in existence on the date of this Agreement
and described on Schedule 3 attached to this Agreement; and (d)
purchasemoney Liens, whether now existing or hereafter arising
(including those arising out of a Capital Lease) on any fixed assets
provided that (1) any property subject to a purchase-money Lien is
acquired by such Borrower in the ordinary course of its respective
business and the Lien on any such property is created contemporaneously
with such acquisition, (2) each such Lien shall attach only to the
property so acquired, and (3) the Debt of any Borrower secured by all
such Liens shall not exceed $150,000 in the aggregate at any time
outstanding.

     Section 6.2.   Debt.  No Borrower will create, incur, assume or
permit to exist any Debt, except:  (a) the Obligations; (b) ordinary
trade accounts payable; (c) Debt of any Borrower (including Debt
arising out of a Capital Lease) secured by purchase-money Liens
permitted by this Agreement; (d) Debt in existence on the date of this
Agreement and described on Schedule 4 attached to this Agreement; (e)
Debt of DCS to Eldyne, provided that the aggregate amount thereof shall
not exceed
$1,000,000 at any time outstanding; (f) Debt of DCS to Unidyne provided
that the aggregate amount thereof shall not exceed $650,000 at any time
outstanding; and (g) the Subordinated Unidyne Debt in an amount not to
exceed $3,600,000 at any time outstanding.

     Section 6.3.   Mergers, Acquisitions, etc.  Except for Permitted
Acquisitions, no Borrower will (a) merge or consolidate with any
Person, or (b) purchase or acquire (1) all or substantially all of the
assets of any Person, or (2) any capital stock of or ownership in any
other Person. Except for joint ventures among the Borrowers, no
Borrower shall become a joint venturer with, or partner of, any other
Person, and no Borrower shall acquire or form a Subsidiary unless such
Subsidiary becomes a Borrower in accordance with Section 8.3 hereof,
provided that the foregoing shall not
prohibit a Borrower from entering into joint contractual arrangements
in the ordinary course of business with other Persons as long as such
Borrower is not liable for the performance of any party to such
contract other than such Borrower's own performance.
     Section 6.4.   Sale and Leaseback.  No Borrower will sell,
transfer or
otherwise dispose of any real or personal property to any Person and
thereafter, directly or indirectly, lease back the same or similar
property.

     Section 6.5.   Dividends.  No Borrower will declare or pay any
dividends; or purchase, redeem, retire or otherwise acquire for value
any of its capital stock now or hereafter outstanding; or make any
distribution of assets to its stockholders as such whether in cash,
assets or obligations of such Borrower; or allocate or otherwise set
apart any sum for the payment of any dividend or distribution on, or
for the purchase, redemption or retirement of, any shares of its
capital stock; or make any other distribution by reduction of capital
or otherwise in respect of any shares of its capital stock; or permit
any of its Subsidiaries to purchase or otherwise acquire for value any
stock of such Borrower or another Subsidiary, except that, subject to
the compliance by such Borrower with the provisions of Section 7 below,
(a) a Borrower may declare and deliver dividends and make distributions
payable solely in common stock of such Borrower, and (b) a Borrower may
purchase or otherwise acquire shares of its capital stock by exchange
for or out of the proceeds received from a substantially concurrent
issue of new shares of its capital stock.

     Section 6.6.   Sale of Assets.  No Borrower will sell, lease,
assign,
transfer or otherwise dispose of any of its now owned or hereafter
acquired assets (including, without limitation, Receivables, the Real
Estate and leasehold interests), except: (a) for Inventory sold or
leased in the ordinary course of business; and (b) the sale or other
disposition of assets (other than the Real Estate) no longer used or
useful in the conduct of its business.

   Section 6.7.   Loans.  No Borrower will make, or permit to exist,
any
loan or advance to Titan, any Affiliate of Titan, or any other Person
except for (a) travel advances to employees in the ordinary course of
business; (b) loans in an aggregate amount not to exceed $125,000
outstanding at any time for all Borrowers; and (c) the Debt permitted
by Sections 6.2(e), (f) and (g).

     Section 6.8.   Guaranties, etc.  No Borrower will assume,
guarantee, endorse or otherwise be or become directly or contingently
responsible or liable (including, but not limited to, any liability
arising out of any agreement to purchase any obligation, stock, assets,
goods or services, or to supply or advance any funds, assets, goods or
services, or to maintain or cause such Person to maintain a minimum
working capital or net worth or otherwise to assure the creditors of
any Person against
loss) for obligations of any Person, or permit any such guaranties or
liabilities to exist, except guaranties by endorsement of negotiable
instruments for deposit or collection or similar transactions in the
ordinary course of business.
     Section 6.9.   Transactions with Affiliates.  No Borrower will
enter
into any transaction, including, without limitation, the purchase, sale
or exchange of property or the rendering of any service, with Titan or
any Affiliate of the Borrower or Titan, except in the ordinary course
of and pursuant to the reasonable requirements of such Borrower's
business and upon fair and reasonable terms no less favorable to such
Borrower than would be applicable in a comparable arm's-length
transaction with a Person not an Affiliate.

     Section 6.10.  Compliance with ERISA.  With respect to any
employee
benefit plan or plans covered by Title IV of ERISA, no Borrower will
permit (a) any prohibited transaction or transactions under ERISA or
the Code that
results, or may result, in liability to a Borrower exceeding in the
aggregate $10,000 or (b) any reportable event under ERISA if, upon
termination of the plan or plans with respect to which one or more such
reportable events shall have occurred, there is or would be any
liability of a Borrower to the PBGC exceeding in the aggregate $10,000.
No Borrower shall adopt, establish or become a party to any
multiemployer plan.
     Section 6.11.  Tax Accounting.  No Borrower will change its tax
accounting method after June 1, 1996.

     Section 7.     Financial Covenants.  Each Borrower agrees that:
     Section 7.1.   Eldyne Tangible Net Worth.  Eldyne shall maintain
as
of
the end of each of its fiscal quarters a Tangible Net Worth of at least
(a) $500,000 as of March 31, 1996, (b) $575,000 as of June 30, 1996,
and (c) $650,000 as of September 30, 1996, and (d) $725,000 as of
December 31, 1996, and at all times thereafter.

     Section 7.2.   Eldyne Leverage.  Eldyne shall maintain as of the
end
of each of its fiscal quarters a Leverage Ratio of not more than (a) 12
to 1 as of March 31, 1996, (b) 11 to 1 as of June 30, 1996, (c) 10 to 1
as of October 31, 1996, and (d) 9 to 1 as of December 31, 1996, and at
all times thereafter.

     Section 7.3.   Eldyne Interest Coverage.  Eldyne shall maintain
for
each period of three, six, nine or 12 months, as applicable, ending on
the last day of each of its fiscal quarters for each of its fiscal
years a ratio of EBIT of Eldyne for such period to interest expense of
Eldyne for such period of at least 2 to 1.

     Section 7.4.   Unidyne Tangible Net Worth.  Unidyne will maintain
as
of the end of each of its fiscal quarters a Tangible Net Worth of at
least (a) $1,000,000 as of March 31, 1996, (b) $1,100,000 as of June
30, 1996, (c) $1,200,000 as of October 31, 1996, and (d) $1,300,000 as
of December 31, 1996, and at all times thereafter.

     Section 7.5.   Unidyne Working Capital.  Unidyne shall maintain as
of
the end of each of its fiscal quarters an excess of current assets over
current liabilities of not less than $1,250,000.

     Section 7.6.   Unidyne Leverage Ratio.  Unidyne shall maintain as
of
the end of each of its fiscal quarters a Leverage Ratio of not more
than (a)     4.60 to 1 as of March 31, 1996, (b) 4.35 to 1 as of June
30, 1996,
(c) 4.10 to 1 as of October 31, 1996, and (d) 3.85 to 1 as of December
31,
1996, and at all times thereafter.

     Section 7.7.   Unidyne Debt Service Coverage.  Unidyne shall
maintain
for each period of three, six, nine or 12 months, as applicable, ending
on the last day of each of its fiscal quarters for each of its fiscal
years, a ratio of EBIDA for such period to interest expense for such
period plus ProRated Current Maturities as of the end of such period of
not less than 1.25 to    1.
     Section 7.8.   Capital Expenditures.  The Borrowers shall not
permit capital expenditures to exceed in any fiscal year (a) $250,000 in
the case of Eldyne, and (b) $600,000 in the case of Unidyne.
     Section 8.     Conditions of Lending.  The making of the Loans
shall be subject to the following conditions:
     Section 8.1.   Conditions Precedent to Closing.  The initial
disbursement of the Loans shall be subject to the following conditions
precedent:
          (a)  The Loan Documents shall have been appropriately
completed, duly executed by the parties thereto, recorded where
necessary and delivered to the Lender.
         (b)  No Default shall have occurred and be continuing.
          (c)  All representations and warranties contained herein shall
be true and correct at the date of the Closing.
          (d)  All legal matters incident to the Loans shall be
satisfactory to counsel for the Lender, and the Borrowers agree to
execute and deliver to the Lender such additional documents and
certificates relating to the Loans as the Lender reasonably may request.
          (e)  The Lender shall have received an opinion of counsel to
the Borrowers and the Guarantors as to such matters as the Lender may
request, in form and substance satisfactory to the Lender.
          (f)  Financing statements in form and substance satisfactory
to the Lender shall have been properly filed in each office where
necessary to perfect the Lender's security interest in the Collateral,
termination statements shall have been filed with respect to any other
financing statements covering all or any portion of the Collateral
(except with respect to Liens permitted by this Agreement), and all
taxes and fees with respect to such recording and filing shall have been
paid by the Borrowers.
          (g)  The Borrowers shall have delivered to the Lender
(1) certified copies of evidence of all actions taken by each Borrower
and the Guarantor to authorize the execution and delivery of this
Agreement and the other Loan Documents, (2) certified copies of the
articles of incorporation, and merger and the bylaws, as applicable, of
each Borrower and the Guarantor, (3) a certificate of incumbency for
the officers of each Borrower and the Guarantor executing the Loan
Documents, (4) a good standing certificate, dated not more than 30 days
prior to the date of the Closing, from the appropriate state official
of any state in which each Borrower or the Guarantor is incorporated or
formed, or, if requested by the Lender with respect to the Borrowers,
qualified to do business, and (5) such additional supporting documents
as the Lender or counsel for the Lender reasonably may request.

          (h)  The Lender shall have received from each Borrower a
Borrowing Base Certificate, an Aging, a listing of accounts payable and
a report setting forth the status of all contracts relating to Eligible
Billed Receivables, all of which shall be of a current date and shall
be in form and substance satisfactory to the Lender.

          (i)  The Lender shall have received evidence satisfactory to
it that the Borrowers have obtained the insurance required by this
Agreement and the Mortgages.

          (j)  The Lender shall have received such landlord and
mortgagee waivers as it shall request with respect to any landlord or
mortgagee that may claim an interest in any of the Collateral.

          (k)  Each Borrower shall have executed and delivered to the
Lender all documents required by the Lender to record and perfect an
assignment of any Receivables arising out of a contract with the
Government, and such assignment shall have been appropriately
acknowledged by the Government, all in conformance with the
requirements of the Assignment of Claims Act.

         (l)  The Lender shall have received and approved the
Acquisition Agreements and all documents relating thereto, and the
transactions subject to the Acquisition Agreements shall have been
consummated.

          (m)  The Lender shall have received and approved (1) the
credit agreement between Titan and Sumitomo Bank, (2) a copy of the
waiver by Sumitomo Bank of any financial covenant violations with
respect to such credit agreement, and (3) a copy of Sumitomo's consent
to the terms of the Acquisition Agreements.
     Section 8.2.   Conditions Precedent to Subsequent Disbursements.
Subsequent Loans and disbursements of Loans shall be subject to the
following conditions precedent:
        (a)  No Default shall have occurred and be continuing.
          (b)  No material adverse change shall have occurred in the
financial condition of any Borrower.
          (c)  All representations and warranties shall be true and
correct at the date of such disbursement, both before and after giving
effect to such disbursement.  The representations and warranties set
forth in Section 4.4 shall be deemed to apply to the most recent
financial statements delivered to the Lender by the Borrowers.
          (d)  No change shall have occurred in any law or regulations
thereunder or interpretations thereof that, in the opinion of counsel
for the Lender, would make it illegal for the Lender to make Loans
hereunder.
          (e)  If required by the Lender, each Borrower shall have
delivered to the Lender a current Borrowing Base Certificate and a
current Aging, duly executed by the chief financial officer of such
Borrower and appropriately completed.
          Each borrowing under this Agreement shall be deemed to be a
representation and warranty by the Borrowers on the date of such
borrowing as to the matters specified in this Section 8.2.
     Section 8.3.   Conditions Precedent to Subsidiaries Becoming
Borrowers.  Each Subsidiary that is formed or acquired after the date
of this Agreement shall become a Borrower under this Agreement, subject
to the satisfaction of the following conditions precedent:
          (a)  The Subsidiary shall execute and deliver to the Lender
an Assumption Agreement.
        (b)  No Default shall have occurred and be continuing.
          (c)  All legal matters incident to such Subsidiary becoming a
Borrower shall be satisfactory to counsel for the Lender, and the
Subsidiary shall execute and deliver to the Lender such additional
documents and certificates relating to the Loans as the Lender
reasonably may request.
          (d)  The Lender shall have received an opinion of counsel to
the Subsidiary, addressed to the Lender, covering such matters as the
Lender may request, in form and substance satisfactory to the Lender.
          (e)  Financing statements in form and substance satisfactory
          to
the Lender shall have been properly filed in each office where
necessary to perfect the security interest of the Lender in the
Collateral of the Subsidiary, termination statements shall have been
filed with respect to any other financing statements covering all or
any portion of such Collateral (except with respect to Liens permitted
by this Agreement), all taxes and fees with respect to such recording
and filing shall have been paid by the Subsidiary and the Lender shall
have received such lien searches or reports as it shall require
confirming that the foregoing filings and recordings have been
completed.
          (f)  The Subsidiary shall have delivered the following
documents to the Lender, each of which shall be certified as of the
date on which the Subsidiary is to become a Borrower, by the secretary
of the
Subsidiary: (1) copies of evidence of all actions taken by the
Subsidiary to authorize
the execution and delivery of the Assumption Agreement and the other
Loan Documents; (2) copies of the organizational documents of the
Subsidiary; and (3) a certificate as to the incumbency and signatures
of the officers of the Subsidiary executing the Assumption Agreement.

        (g)  The Lender shall have received a certificate of good
standing (or similar instrument) issued by the appropriate state
official of the state of formation of the Subsidiary, dated within 30
days of the date of the applicable Assumption Agreement.
          (h)  The Lender shall have received (1) an Aging of
Receivables of the Subsidiary, (2) a schedule of unbilled Receivables
of the Subsidiary, (3) a report relating to the Receivables, setting
forth a description of contracts giving rise to Receivables of the
Subsidiary, the percentage of completion of the work to be performed
with respect to such contracts, the amounts billed under such contracts
and the amounts remaining to be billed, all of which shall be of a
current date and shall be in form and substance satisfactory to the
Lender, and (4) a current Borrowing Base Certificate from the
Subsidiary.
          (i)  If required by the Lender, the Lender shall have
received a satisfactory audit with respect to the Receivables of such
Subsidiary.
     No Receivable of a Subsidiary shall be an Eligible Receivable
prior to the date on which all of the foregoing conditions are
satisfied.
     Section 8.4.   Post-Closing Satisfaction.  The Borrowers agree
that any conditions set forth in Section 8.1 that are not satisfied on
the date of the Closing shall be satisfied not later than (a) June 30,
1996, with respect to Section 8.1(g)(4), and (b) June 11, 1996, with
respect to all other conditions precedent set forth in Section 8.1.
     Section 9.     Default.
    Section 9.1.   Events of Default.  Each of the following shall
constitute an Event of Default under this Agreement:

          (a)  Failure of the Borrowers to pay any Obligation to the
Lender, including, without limitation, the principal of or interest on
the Notes or any of the Loans, when the same shall become due and
payable, whether at maturity, as a result of the Lender's demand for
payment or otherwise, and such failure shall continue for a period of
ten days; or

          (b)  If any Borrower refuses to permit the Lender to inspect,
examine, verify or audit the Collateral in accordance with the
provisions of this Agreement; or

        (c)  Failure of the Borrowers to perform or observe any
financial covenant contained in Section 7 of this Agreement; or

          (d)  Failure of the Borrowers to perform or observe any other
term, condition, covenant, warranty, agreement or other provision
contained in this Agreement (except any such failure resulting in the
occurrence of another Event of Default described in this Section),
within 30 days after receipt of notice from the Lender specifying such
failure; or

          (e)  Discovery that any representation or warranty made or
deemed made by any Borrower in this Agreement or any statement or
representation made in any certificate, report or opinion delivered
pursuant to this Agreement (including any Borrowing Base Certificate)
or in connection with any borrowing under this Agreement was materially
untrue or is breached in any material respect; or

          (f)  If, as a result of default, any other obligation of any
Borrower or the Guarantor for the payment of any Debt in excess of
$50,000 becomes or is declared to be due and payable prior to the
expressed
maturity thereof, unless and to the extent that the declaration is
being contested in good faith in a court of appropriate jurisdiction;
or
       (g)  Any Borrower makes an assignment for the benefit of
creditors, files a petition in bankruptcy, petitions or applies to any
tribunal for any receiver or any trustee of such Borrower or any
substantial part of its property, or commences any proceeding relating
to such Borrower under any reorganization, arrangement, readjustments
of debt, dissolution or liquidation law or statute of any jurisdiction,
whether now or hereafter in effect; or

          (h)  If, within 30 days after the filing of a bankruptcy
petition or the commencement of any proceeding against any Borrower
seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future
statute, law or regulation, the proceeding shall not have been
dismissed, or, if, within 30 days after the appointment, without the
consent or acquiescence of such Borrower, of any trustee, receiver or
liquidator of such Borrower or of all or any substantial part of the
properties of such Borrower, the appointment shall not have been
vacated; or
          (i)  Any judgment against any Borrower in excess of $50,000
or any attachment in excess of $50,000 against any property of any
Borrower remains unpaid, undischarged, unbonded or undismissed for a
period of 30 days, unless and to the extent that the judgment or
attachment is appealed in good faith in a court of higher jurisdiction
and the appeal remains pending; or
          (j)  The occurrence of any of the events described in the
three immediately preceding clauses with respect to the Guarantor; or
          (k)  If any of the following events shall occur or exists
with respect to any Borrower or any employee benefit or other plan
established, maintained or to which contributions have been made by
such Borrower or any other Person that, together with such Borrower,
would be treated as a single employer under Section 4001 of ERISA, and
the Lender reasonably determines that the financial condition of such
Borrower would be materially and adversely affected thereby:  (1) any
prohibited transaction (as defined in Section 406 of ERISA or Section
4975 of the Code), (2) any reportable event (as defined in Section 4043
of ERISA and the regulations issued thereunder), (3) the filing under
Section 4041 of ERISA of a notice of intent to terminate any such plan
or the termination of such plan, or (4) the institution of proceedings
by the PBGC under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any such plan; or
       (l)  A material adverse change occurs in the financial or
business condition of any Borrower; or

          (m)  The dissolution, liquidation or termination of existence
of any Borrower or the Guarantor; or

          (n)  If Titan at any time owns, directly or indirectly, less
than 100% of the outstanding voting stock of the Borrowers; or

          (o)  If the Borrowers fail to give the Lender any notice
required by this Agreement within ten days after the occurrence of the
event giving rise to the obligation to give such notice; or

          (p)  The occurrence of an event of default under any other
Loan Document; or

          (q)  If any Borrower shall be debarred or suspended from any
contracting with the Government, unless and to the extent that the
debarment or suspension is being appealed in good faith in appropriate
proceedings and the appeal remains pending; or

          (r)  If the Guarantor gives notice to the Lender purporting
to terminate the Guarantor's liability under the Guaranty.
   Section 9.2.   Remedies upon Default.  Upon the occurrence of an
Event of Default, the following provisions shall be applicable:
          (a)  The Lender, at its option, may terminate its obligation
to make Loans under this Agreement and declare all Obligations, whether
incurred prior to, contemporaneous with or subsequent to the date of
this Agreement, and whether represented in writing or otherwise,
immediately due and payable and may exercise all of its rights and
remedies against the Borrowers and any Collateral.
          (b)  The Lender may foreclose its lien and security interest
in the Collateral in any way permitted by law and shall have, without
limitation, the remedies of a secured party under the UCC.  The Lender
may enter the Borrowers' premises without legal process and without
incurring liability to the Borrowers and remove the Collateral to such
place or places as the Lender may deem advisable, or the Lender may
require the Borrowers to assemble the Collateral and make the
Collateral available to the Lender at a convenient place and, with or
without having the Collateral at the time or place of sale, the Lender
may sell or otherwise dispose of all or any part of the Collateral
whether in its then condition or after further preparation or
processing, either at public or private sale or at any broker's board,
in lots or in bulk, for cash or for credit, at any time or place, in
one or more sales and upon such terms and conditions as the Lender may
reasonably elect.  The Lender shall give not less than five Business
Days' prior written notice to the Borrowers of the time and place of
any public sale of the Collateral or the time after which the
Collateral may be sold in a private sale, which the Borrowers agree
constitutes commercially reasonable notice.  At any such sale the
Lender may be the purchaser, subject to the applicable provisions of
the UCC.
          (c)  The proceeds from any sale of the Collateral by the
Lender shall first be applied to any costs and expenses in securing
possession of the Collateral and to any expenses in connection with the
sale.  The net proceeds will be applied toward the payment of the
Obligations. Application of the net proceeds as to particular
Obligations or as to principal or interest shall be in the Lender's
absolute discretion.  Any deficiency will be paid to the Lender
forthwith upon demand, and any surplus will be paid to the Borrowers if
the Borrowers are not otherwise indebted to the Lender.
          (d)  To the extent that the Obligations are now or hereafter
secured by property other than the Collateral described herein or by
the guarantee, endorsement or property of any other Person, the Lender
shall have the right to proceed against such other guarantee,
endorsement or property upon the occurrence of an Event of Default, and
the Lender shall have the right, in its sole discretion, to determine
which rights, security, liens, security interests or remedies the
Lender shall at any time pursue, relinquish, subordinate, modify or
take any other action with respect thereto, without in any way
modifying or affecting any of them or any of the Lender's rights
hereunder.
          (e)  The Lender is hereby authorized at any time or from time
to time, without notice to the Borrowers (any such notice being
expressly waived by the Borrowers), to setoff and apply any deposit
(general or special, time or demand, provisional or final) at any time
held, including any certificate of deposit, and other indebtedness at
any time owed by the Lender, whether or not any such deposit or
indebtedness is then due, to or for the credit or account of any
Borrower against any and all of the Obligations.
          (f)  EACH BORROWER, HAVING KNOWLEDGE THAT IT MAY BE ENTITLED
TO NOTICE AND A HEARING PRIOR TO REPOSSESSION OF THE COLLATERAL, WAIVES
ANY RIGHT THAT IT MAY HAVE UNDER EXISTING OR FUTURE LAW TO NOTICE OF
FORECLOSURE AND ANY OTHER ACT DESCRIBED HEREIN, TO ANY HEARING THAT MAY
BE HELD RELATING TO FORECLOSURE OR ANY OTHER SUCH ACTS, AND TO ANY
NOTICE THAT MAY BE REQUIRED TO BE GIVEN BY THE LENDER PRIOR TO SUCH
HEARING, EXCEPT FOR NOTICES REQUIRED BY THE LOAN DOCUMENTS AND THE UCC.
EACH BORROWER EXPRESSLY WAIVES ITS RIGHT TO A TRIAL BY JURY WITH
RESPECT TO
ANY LITIGATION RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.

          (g)  The Lender itself may perform or comply, or otherwise
cause performance or compliance, with the obligations of the Borrowers
contained in this Agreement, including, without limitation, the
obligations of the Borrowers to defend and insure the Collateral.  The
expenses of the Lender incurred in connection with such performance or
compliance, together with interest thereon at the Prime Rate plus 3%,
shall be payable by the Borrowers to the Lender on demand and shall
constitute Obligations.

     Section 10.    Miscellaneous.
     Section 10.1. Collection Costs.  The Borrowers shall pay all of
the
reasonable costs and expenses incurred by the Lender in connection
with the enforcement of this Agreement and the other Loan Documents,
including, without limitation, reasonable attorneys' fees and
expenses.

     Section 10.2. Modification and Waiver.  Except for the other
documents expressly referred to in this Agreement, this Agreement
contains the entire agreement between the parties and supersedes all
prior agreements between the Lender and any Borrower (including,
without limitation, the Original Agreement).  No modification or
waiver of any provision of the Notes or this Agreement and no consent
by the Lender to any departure therefrom by any Borrower shall be
effective unless such modification or waiver shall be in writing and
signed by an officer of the Lender with a title of vice president or
any higher office, and the same shall then be effective only for the
period and on the conditions and for the specific instances and
purposes specified in such writing. No notice to or demand on the
Borrowers in any case shall entitle the Borrowers to any other or
further notice or demand in similar or other circumstances.  No
failure or delay by the Lender in exercising any right, power or
privilege hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege.  The rights and remedies of the Lender contained in this
Agreement are cumulative and not exclusive of any rights or remedies
otherwise provided by law.

     Section 10.3. Notices.  All notices, requests, demands or other
communications provided for in this Agreement shall be in writing
(except for requests for Loans made by telephone as described in
Section 2.1 above) and shall be delivered by hand, sent prepaid by
Federal Express (or a comparable overnight delivery service), sent by
telecopy or facsimile or sent by the United States mail, certified,
postage prepaid, return receipt requested, to the Lender, at 8245 Boone
Boulevard, Suite 300, Vienna, Virginia 22182, Attention: Timothy J.
Duggan, Vice President, or to the Borrowers at 3033 Science Park Road,
San Diego, California  92121, Attention: Ray H. Guillaume.  Any notice,
request, demand or other communication delivered or sent in the
foregoing manner shall be deemed given or made (as the case may be)
upon the earliest of (a) the date it is actually received, (b) the
business day after the day on which it is delivered by hand or
transmitted by telecopy or facsimile, (c) the business day after the
day on which it is properly delivered to Federal Express (or a
comparable overnight delivery service), or (d) the third business day
after the day on which it is deposited in the United States mail.  Any
Borrower or the Lender may change its address by notifying the other
party of the new address in any manner permitted by this Section 10.3.
Rejection or other refusal to accept or the inability
to deliver because of a changed address of which no notice was given
shall not affect the date of such notice, election or demand sent in
accordance with the foregoing provisions.

     Section 10.4. Counterparts.  This Agreement may be executed by the
parties hereto individually or in any combination, in one or more
counterparts, each of which shall be an original and all of which
together constitute one and the same agreement.
     Section 10.5. Captions.  The captions of the various sections and
paragraphs of this Agreement have been inserted only for the purposes
of convenience; such captions are not a part of this Agreement and
shall not be deemed in any manner to modify, explain, enlarge or
restrict any of the provisions of this Agreement.

     Section 10.6. Survival of Agreements.  All agreements,
representations
and warranties made herein shall survive the delivery of this Agreement
and the making and renewal of the Loans hereunder.

     Section 10.7. Fees and Expenses.  Whether or not any Loans are
made
hereunder, the Borrowers shall pay on demand all reasonable out-of-
pocket costs and expenses incurred by the Lender in connection with the
preparation, negotiation, execution, delivery, filing, recording and
administration of this Agreement and any of the documents executed or
delivered in connection herewith, including, without limitation, the
reasonable fees and expenses of counsel to the Lender, and local
counsel who may be retained by the Lender, with respect to this
Agreement and such documents and any amendments thereof and with
respect to advising the Lender as to its rights and responsibilities
thereunder.

     Section 10.8. Use of Defined Terms.  All terms defined in this
Agreement shall have the defined meanings when used in certificates,
reports or other documents made or delivered pursuant to this
Agreement, unless the context shall otherwise require.

     Section 10.9. Successors and Assigns.  This Agreement shall inure
to
the benefit of and bind the respective parties hereto and their
successors and assigns; provided, however, that no Borrower may assign
its rights hereunder without the prior written consent of the Lender.

     Section 10.10. Accounting Terms.  All accounting terms used herein
that are not otherwise expressly defined in this Agreement shall have
the meanings respectively given to them in accordance with GAAP in
effect on the date of this Agreement.  Except as otherwise provided
herein, all financial computations made pursuant to this Agreement
shall be made in accordance with GAAP and all balance sheets and other
financial statements shall be prepared in accordance with GAAP.  Except
as otherwise provided herein, whenever reference is made in any
provision of this Agreement to a balance sheet or other financial
statement or financial computation with respect to any Borrower, such
terms shall mean a consolidated balance sheet or other financial
statement or financial computation, as the case may be, with respect to
any Borrower.

     Section 10.11. Interpretation.  This Agreement and the rights and
obligations of the parties hereunder shall be construed and interpreted
in accordance with the laws of the Commonwealth of Virginia, without
reference to conflict of laws principles.

     Section 10.12. Joint and Several Liability.  The representations,
warranties, covenants and agreements contained in this Agreement and
the other Loan Documents shall be deemed to have been made, given and
undertaken by the Borrowers jointly and severally.

     IN WITNESS WHEREOF, the Borrowers and the Lender have caused this
Agreement to be signed by their duly authorized representatives all as
of the day and year first above written.

                              LENDER:
                             CRESTAR BANK,
                         a Virginia banking corporation
                              By: _/s/ Brian Monday
                                   __ Brian R. Monday
                                   Vice President
                              BORROWERS:
                              ELDYNE, INC., a California
                               corporation
                              By:
                              _/s/Roger Hay
                              Name: Roger Hay
                              Title: Sr. VP/CFO

                              UNIDYNE CORPORATION, a
                               Virginia corporation


                              By:
                              _/s/ Roger Hay
                              Name:Roger Hay
                              Title: Sr. VP/CFO


                              DCS ACQUISITION SUB, INC., a
                               Delaware
                              corporation

                              By:
                              _/s/ Roger Hay
                              Name:Roger Hay
                              Title: Sr. VP/CFO


<PAGE>
               LIST OF SCHEDULES AND EXHIBITS



Schedule 1     --  Locations of Inventory and Equipment

Schedule 2     --  Listing of Other Corporate Names

Schedule 3     --  Outstanding Liens

Schedule 4     --  Outstanding Debt

Schedule 4.5   --  Litigation

Exhibit A --  Form of Assumption Agreement

Exhibit B --  Form of Covenant Compliance Certificate
<PAGE>
                                Schedule 1

                   Locations of Inventory and
Equipment

<PAGE>
                                Schedule 2

                     Listing of Other Corporate Names

     Unidyne formerly used the name "Unidyne
International." <PAGE>
                               Schedule 3

                            Outstanding Liens

                              NONE
<PAGE>
                              Schedule 4

                           Outstanding Debt

                              NONE

<PAGE>
                          Schedule 4.5

                           Litigation

1.   Unidyne has three outstanding litigation actions: Shultz v.
     Unidyne Corporation, Anna R. Artis v. Unidyne, and Arthur George
     v. Unidyne Corporation et al.

2.   DCS has no outstanding litigation actions.

3.   Eldyne has no outstanding litigation actions.  Eldyne has a
commitment
     to pay the Business Software Alliance $25,000.00 on April 29, 1996
     for software licenses.  A copy of that settlement agreement is
     attached to this Schedule 4.5.


<PAGE>
                               EXHIBIT A

                     Form of Assumption Agreement


                         ASSUMPTION AGREEMENT


  THIS ASSUMPTION AGREEMENT (as the same may be amended, modified or
supplemented from time to time, the Assumption), dated as of
________________, made by _______________________, a
____________________ (the Subsidiary), in favor of CRESTAR BANK (the
Bank), recites and provides:

                        R E C I T A L S

     Pursuant to the terms of an Amended and Restated Loan and Security
Agreement, dated as of May 24, 1996 (as amended, modified or
supplemented from time to time, the Loan Agreement), between Eldyne,
Inc., a California corporation (Eldyne), Unidyne Corporation, a
Virginia corporation (Unidyne), and DCS Acquisition Sub, Inc., a
Delaware corporation (DCS, and together with Eldyne and Unidyne, the
Original Borrowers), the Bank agreed to extend credit to the Original
Borrowers. Terms defined in the Loan Agreement shall have the same
defined meanings when such terms are used in this Assumption.

     [_________________] owns ____% of the capital stock of the
Subsidiary. [The Original Borrowers][______________________] and the
Subsidiary have combined certain business functions, which include
applying for and making
use of credit on a joint basis.  The Borrowers and the Subsidiary
derive substantial direct and indirect benefits from their
relationships with each other.  Accordingly, the Original Borrowers
have requested that the Subsidiary become a Borrower under the Loan
Agreement and the other Loan Documents.  The Bank has agreed to accept
the Subsidiary as a Borrower thereunder, and the Subsidiary has agreed
to assume the Obligations. Accordingly, the Subsidiary agrees as
follows:
     1.   The Subsidiary (a) assumes and agrees to be jointly and
severally liable with [the Original Borrowers][each other Borrower] for
all of the Obligations now existing or hereafter arising, including,
without limitation, the Obligations arising out of the Loan Agreement,
the Loans, the Notes and the other Loan Documents, and (b) agrees to be
jointly and severally bound by all of the terms, covenants and
conditions of the Loan Agreement, the Notes and the other Loan
Documents, and hereby assumes all of the Obligations of the [Original]
Borrower[s] thereunder and agrees to be jointly and severally liable
therefor.
   2.   The Subsidiary represents that (a) its chief executive office,
within the meaning of Section 9.103(3)(d) of the Uniform Commercial
Code, is located at ___________
____________________________________________, and (b) during the five
years prior to the date of this Assumption, the Subsidiary has not used
any fictitious or corporate name other than its current corporate name.
All of the representations and warranties set forth in the Loan
Documents are incorporated by reference in this Assumption, and shall
be deemed to have been made and given by the Subsidiary as of the date
hereof as though such representations and warranties were applicable to
it, except that the representations and warranties set forth in Section
4.4 of the Loan Agreement shall be deemed to have been given with
respect to the most recent financial statements provided to the Bank in
accordance with the provisions of Section 5.8 of the Loan Agreement.

     3.   The Subsidiary grants to the Bank, in accordance with the
provisions of Section 3.1 of the Loan Agreement, a security interest in
all of the Collateral of the Subsidiary as security for the
Obligations.
   4.   The Subsidiary agrees to execute, deliver and, if applicable,
record, such additional instruments, documents and agreements as the
Bank may reasonably require for the purpose of effecting the assumption
described herein.

     IN WITNESS WHEREOF, the Subsidiary has caused this Assumption to
be executed by its duly authorized representative as of the day and
year first written above.
                              _________________________, a
                               ___________________________


                              By: _______________________________
                              Name: ____________________________
                              Title: _____________________________

<PAGE>
                           EXHIBIT B

            Form of Covenant Compliance Certificate

                          CRESTAR BANK

                     Credit Facilities for
             ELDYNE, INC., AND UNIDYNE
CORPORATION

                COVENANT COMPLIANCE CERTIFICATE

   In connection with the terms of an Amended and Restated Loan and
Security Agreement, dated as of May 24, 1996 (as amended, modified or
supplemented from time to time, the Loan Agreement), between Crestar
Bank, a Virginia banking corporation (the Bank), Eldyne, Inc., a
California corporation (Eldyne), Unidyne Corporation, a Virginia
corporation (Unidyne), and DCS Acquisition Sub, Inc. (DCS, and together
with Eldyne and Unidyne, the Borrowers), the undersigned, on behalf of
the Borrowers, certifies to the Bank that the following information is
true and correct as of the date hereof:

     1.   No Default or Event of Default has occurred and is
continuing.
     2.   For the period beginning with the last report, dated as of
_______________, 19__, and ending on the date of this Covenant
Compliance Certificate:

          (a)  the sum of the aggregate unpaid principal amount of
     Working Capital Loans outstanding has not exceeded the Borrowing
     Base;
          (b)  the aggregate unpaid principal amount of Working
   Capital Loans outstanding has not exceeded the Working Capital
     Limit; and

         (c)  the outstanding Working Capital Loans made to:

               (1)  Eldyne have not exceeded the lesser of the
     Eldyne Sublimit or the Eldyne Borrowing Base; and
               (2)  Unidyne have not exceeded the lesser of the
     Unidyne Sublimit or the Unidyne Borrowing Base.

     3.   Eldyne's Tangible Net Worth as of ____________ is
$________________, calculated as follows:














     4.   The ratio of Eldyne's Total Liabilities to Eldyne's
Tangible
Net
Worth for the fiscal quarters ending on __________________, is ____


to 1, calculated as follows:














     5.   For the period of ___ months ending on ______________, the
ratio
of Eldyne's EBIT for such period to Eldyne's interest expense for
such period is ____ to 1, calculated as follows:

     6.   Unidyne's Tangible Net Worth as of ____________ is
$________________,  calculated as follows:





     7.   The excess of Unidyne's current assets over Unidyne's
current
liabilities as of ____________ is $______________, calculated as


follows:














     8.   The ratio of Unidyne's Total Liabilities to Unidyne's
Tangible
Net Worth, for the fiscal quarter of Unidyne ended ____________, 19__,

is ____ to 1, calculated as follows:







    9.   For the period of ___ months ending on ______________, the
ratio
of Unidyne's EBIDA for such period to Unidyne's interest expense for


such period plus Pro-Rated Current Maturities as of the end of such


period is ____ to 1, calculated as follows:



     10.  As of the date hereof, the aggregate Capital Expenditures



for



Eldyne for Eldyne's fiscal year to date is $__________________,



calculated as follows:



   11.  As of the date hereof, the aggregate Capital Expenditures
for
Unidyne for Unidyne's fiscal year to date is $__________________,

calculated as follows:









     Capitalized terms used in this Covenant Compliance Certificate
shall have the same meanings as those assigned to them in the Loan
Agreement. The foregoing is true and correct as of _______________,
19___.
     Dated ______________, 19___.



                              ___________________________________
                              Name: _________________________
                              Title: __________________________
                              ELDYNE, INC., a California
                              corporation